Auckland tolls to fund infrastructure crisis

Auckland is easily New Zealand’s largest city, and like many big cities it is suffering from a dearth of roads and transport infrastructure. Conservatively, traffic congestion is costing the city more than $1B in productivity per annum, a figure that is growing.

In a high level report released recently “Funding Auckland’s Transport Future”, we’re told that the only way Auckland’s transport is going to be able to cope with the expected doubling of its population over the next 30 years, is by investing significantly in infrastructure projects. The required investment is thought to be somewhere in the order of $12B.

Projects being considered include the city rail link, a second harbour crossing, the east-west motorway link, rail access to the airport and regional road upgrades.

The think tank responsible for the report consisted of 17 experts appointed by Auckland’s mayor. They explored more the 20 possible funding models to address the shortfall including a regional GST, various tourism taxes and even a lottery. Ultimately it was found that only two options could address both key issues of raising revenue and controlling peak demand.

The first option, to increase council rates and fuel levies, was not a popular choice. The second option was to introduce a road pricing mechanism. Given Aucklanders’ reticence to agree to a proposed tax hike, the group strongly advocated the road pricing, or toll road model.

Whilst the next steps are unclear, the group warned that a final decision would need to be confirmed by 2015 to allow the necessary implementation time. As the discussions continue, Aucklanders are demanding that their officials simply get on with it!

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